NR0120: Public preparedness to absorb 12% VAT

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release January 20, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Email: paggawa@edsamail.com.ph, anakpawis2003@yahoo.com
Cellphone number 09213907362
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Beltran challenges Congress to first determine the public's preparedness to
absorb a 12% VAT given low wages, high prices, and widespread unemployment

Anakpawis Representative Crispin Beltran today said that Congress should drop
deliberations on the value added and working people are in any shape to
absorb an additional increase in prices of commodities. He said that Congress
should prioritize deliberations on the P125 across-the-board wage hike bill
and use the debates as a means to gauge the preparedness of the public to
absorb a new VAT.

"The workers and other laboring and impoverished sectors have nothing to spare
for this VAT. What the people need are increases in wages, salaries and
benefits - not new taxes,' he said.

Beltran said that prices of basic commodities increased sharply in November
2004, with the inflation rate recorded at 7.6%, the highest in five years.
Price increases were a result of soaring global oil prices which in turn
caused steep increases in the prices of food, LPG, kerosene and other fuels,
electricity rates and transportation. Price increases were also notable in
items such as cooking oil, juices, coffee, sugar and seasonings.

Chicken, pork and vegetables were particularly more expensive in 2004 as the
country felt the impact of trade liberalization. Cheap imports sent local
raiser and growers out of business, while traders sold the imports at higher
prices.

"Prices of commodities continue to rise and inflation to grow, but through it
all there has been no wage increase to help the people cope with the rising
costs. It's not going to be a 2% increase in VAT, but prices will be taxed by
12%. There's a big difference between 10% and 12%,' he said.

The veteran labor leader also pointed out that the average family income has
decreased by 10 percent in the last year. Family savings decreased on the
average, with the bottom 30% experiencing income shortfalls. Ibig sabihin, mas
maraming Pilipino ang wala talagang naiiipon o naitatabi kahit for emergency
needs," he said. "Given that, how will ordinary Filipinos - the laborers,
the rank and file government employees, the unemployed urban poor, the
farmworkers, the peasants - be equipped to deal with the 12% VAT imposition?"

Beltran said that as of January 14, 2005, the cost of living for a family of
six in the NCR is around pegged at P602 .31 for a family of six in the National
Capital region, or P498.04 on the average nationwide. The prevailing daily
nominal minimum wage, however, is only P280 for non-agricultural workers and
P213 for agricultural workers. The actual value of P280, however is much
lower. Using 1994 as the base year, the real value of current wages in the NCR
is only P152.17.

Finally, Beltran said that a 12% VAT will also direly affect the unemployed
brothers and sisters. The VAT increase is an indirect tax, and its
implementation will be across-the-board and that means everyone will be
affected. The unemployed will be even ill-equipped to adjust to the new VAT.
That means more starvation, more forced scrimping. The country continues to
have double-digit unemployment rates throughout 2004? 13.7% in April, 11.7% in
July, and 10.9% in October. The country's unemployment rate is among the
highest in the world," he said.#